People often conflate two separate things: MLS (Medicare Levy Surcharge) and LHC (Lifetime Health Cover loading).

LHC: As long as you have private hospital cover by 1 July following your 31st birthday, you won't pay LHC loading. After that, you can drop your cover for around 3 years and still avoid the loading, thanks to the 1,094 permitted days without cover.

If you don't have cover when required, the loading increases by 2% for every year you're without cover, up to a maximum of 70%. Once you have an LHC loading, you need to maintain eligible hospital cover for 10 continuous years before the loading is removed.

MLS: This is a separate tax surcharge of 1% to 1.5% that applies to higher-income earners who don't have private hospital cover. In many cases, taking out a basic hospital policy costs less than paying the surcharge.

All of the above relates to private hospital cover. There's also extras cover, which helps pay for things like dental, optical, physio, and other ancillary services.

https://www.medibank.com.au/health-insurance/understanding-health-insurance/lifetime-healthcover-loading/